Business Ethics - globaledulink.co.uk · The Basics ..... 18
Transcript of Business Ethics - globaledulink.co.uk · The Basics ..... 18
Business Ethics
TABLE OF CONTENTS
Module One: Getting Started .............................................................................................................4
Workshop Objectives ................................................................................................................................ 4
Module Two: What is Ethics? .............................................................................................................5
What Is Business Ethics? ........................................................................................................................... 5
10 Benefits of Managing Ethics ................................................................................................................ 6
Case Study ................................................................................................................................................. 6
Module Two: Review Questions ................................................................................................................ 8
Module Three: Implementing Ethics in the Workplace ........................................................................9
Benefits ..................................................................................................................................................... 9
Guidelines for Managing Ethics in the Workplace .................................................................................. 10
Roles and Responsibilities ....................................................................................................................... 10
Module Three: Review Questions ........................................................................................................... 11
Module Four: Employer/Employee Rights ......................................................................................... 12
Privacy Policies ........................................................................................................................................ 12
Harassment Issues .................................................................................................................................. 13
Technology .............................................................................................................................................. 13
Module Four: Review Questions ............................................................................................................. 14
Module Five: Business & Social Responsibilities ................................................................................ 15
Identifying Types of Responsibilities ....................................................................................................... 15
Case Study ............................................................................................................................................... 16
Handling Conflicting Social and Business Responsibilities ...................................................................... 16
Case Study ............................................................................................................................................... 16
Module Five: Review Questions .............................................................................................................. 17
Module Six: Ethical Decisions ........................................................................................................... 18
The Basics ............................................................................................................................................... 18
Balancing Personal and Organizational Ethics ....................................................................................... 19
Common Dilemmas ................................................................................................................................. 19
Making Ethical Decisions ........................................................................................................................ 20
Overcoming Obstacles ............................................................................................................................ 20
Module Six: Review Questions ................................................................................................................ 21
Module Seven: Whistle Blowing ....................................................................................................... 22
Criteria and Risk ...................................................................................................................................... 22
The Process ............................................................................................................................................. 22
When You Should “Blow the Whistle” .................................................................................................... 23
Module Seven: Review Questions ........................................................................................................... 24
Module Eight: Managerial Ethics ...................................................................................................... 25
Ethical Management .............................................................................................................................. 25
Identifying the Characteristics ................................................................................................................ 25
Ensuring Ethical Behavior ....................................................................................................................... 26
Module Eight: Review Questions ............................................................................................................ 27
Module Nine: Unethical Behavior ..................................................................................................... 28
Recognize & Identify ............................................................................................................................... 28
Preventing ............................................................................................................................................... 29
Addressing .............................................................................................................................................. 29
Interventions ........................................................................................................................................... 29
Module Nine: Review Questions ............................................................................................................. 30
Module Ten: Ethics in Business (I) ..................................................................................................... 31
Organization Basics ................................................................................................................................ 31
Addressing the Needs ............................................................................................................................. 31
Ethical Principles ..................................................................................................................................... 32
Module Ten: Review Questions .............................................................................................................. 33
Module Eleven: Ethics in Business (II) ............................................................................................... 34
Ethical Safeguards .................................................................................................................................. 34
Developing a Code of Ethics .................................................................................................................... 34
Performing an Internal Ethics Audit ....................................................................................................... 35
Upholding the Ethics Program ................................................................................................................ 35
Module Eleven: Review Questions .......................................................................................................... 36
Module Twelve: Wrapping Up .......................................................................................................... 37
Words from the Wise .............................................................................................................................. 37
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Module One: Getting Started
A company’s ethics will determine its reputation. Good business
ethics are essential for the long-term success of an organization.
Implementing an ethical program will foster a successful company
culture and increase profitability. Developing a business ethics
program takes time and effort, but doing so will do more than
improve business, it will change lives.
A company's ethics will have an influence on all levels of business. It
will influence all who interact with the company including
customers, employees, suppliers, competitors, etc. All of these groups will have an effect on the way a
company's ethics are developed. It is a two way street, the influence goes both ways, which makes
understanding ethics a very important part of doing business today. Ethics is very important, as news
can now spread faster and farther than ever before.
Unit Objectives
Research has consistently demonstrated that when clear goals are associated
with learning, it occurs more easily and rapidly. With that in mind, let’s review our
goals for today.
At the end of this unit, you should be able to:
Define and understand ethics.
Understand the benefits of ethics.
Create strategies to implement ethics at work.
Recognize social and business responsibility.
Identify ethical and unethical behavior.
Learn how to make ethical decisions and lead with integrity.
There is such no such thing as a minor lapse
of integrity.
Tom Peters
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Module Two: What is Ethics?
A human being’s personal ethics determine individual standards of right and
wrong. Ethics allow people to determine what they should do in a given
situation. Each person develops ethical standards, and it is the responsibility
of each individual to examine personal morals and behavior. In business,
ethics refers to the behavior relating to the moral problems that occur in
business organizations.
What Is Business Ethics?
People often automatically assume that businesses are unethical. Business seems
to be constantly linked to scandals. Given the media attention to bad ethical
decisions, companies that practice good business ethics can distinguish themselves
in the minds of their customers and their employees. The company culture helps determine the ethics of
the organization. It is crucial that businesses behave ethically in every working relationship.
Ethical Obligations:
Employees: Companies need to treat all of their employees ethically. Begin by providing
employees with the rights guaranteed to them by the United States Department of Labor.
Ethical businesses, however, may go beyond the minimum requirements in the way that they
treat their employees.
Shareholders and investors: There is a moral obligation to pay back investors and meet the
needs of shareholders, particularly low level shareholders.
Customers: Every business needs to build ethical customer relationships by providing safe
products and honoring warranties. Consumers are growing more aware of which companies
treat them fairly, and they will support the ones they trust.
Ethics is the activity of man directed to secure
the inner perfection of his own personality.
Albert Schweitzer
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Community: Businesses have an ethical obligation to be involved in their local communities. This
includes communities where they interact with customers and beyond.
Vendors and Other Companies: Always deal ethically with vendors and other organizations you
work with.
10 Benefits of Managing Ethics
Operating an ethical business has a number of rewards. The circumstances of
each company will determine the results of managing ethics. There are,
however, 10 common benefits that all companies have when they manage their
business ethics.
Benefits:
Ethical companies comply with all legal requirements and are less likely to be fined or sued.
Consumers are more likely to support a business with a reputation as an ethical organization.
Companies with ethical values improve their communities.
Ethical rules save organizations from accidently violating the rights of employees or consumers.
Employees’ personal moral standards will improve at an ethical business.
A fair working environment facilitates teamwork and productivity.
Many successful financial business practices are reinforced by ethical business practices.
Established ethical guidelines will lead a company in times of change and stress.
Ethical companies retain employees and save money in turnover.
There is personal satisfaction in doing the right thing.
Case Study
E.F. Hutton began in 1904 and became a well-respected financial institution.
By the 1980s, however, the company’s reputation was tarnished by
unethical behavior. In 1980, the company was discovered kiting and money
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laundering. Managers were instructed to and were rewarded for “borrowing” from the accounts of the
customers. Many who agreed to the practice were later brought up on charges and fired. The company
made financial restitution. Evidence of money laundering resurfaced in 1987, right before the stock
market crashed, and the organization was not able to survive the second scandal.
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Module Two: Review Questions
1. Companies need to treat all of their employees ethically?
a) True b) False
2. Which is a benefit of running an ethical business?
a) Less likely to be fined or sued b) Improve their community c) More productivity d) All of the above
3. What unethical behavior caused the E.F. Hutton company to fail?
a) Charity donations b) Check kiting c) Reporting accounting errors d) Paying fair wages
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Module Three: Implementing Ethics in the
Workplace
Implementing ethics in the workplace is a complex but rewarding
task. Every individual has a unique set of ethical standards. Allowing
each person to follow his or her moral compass will result in varied
results. Companies need to focus on implementing uniform ethical
standards and rules throughout their organizations. Employees
should never have to question whether or not they are doing the
right thing.
Benefits
We discussed the top 10 benefits of managing ethics in the previous module.
Implementing ethics in the workplace will also lead to better profits and long-term growth. Unethical
business practices can cause immediate financial gain, but they will cost companies customers and
employees over time. When unethical practices become public knowledge, it is difficult for a business to
recover its reputation. Organizations with reputations for being ethical will also find it easier to earn
credit, find investors, and expand into international markets. There are also benefits at the
organizational level.
Organizational Benefits:
Convinces employees that the company truly values ethical decision-making.
Builds awareness of ethical issues.
Creates an ethical guideline for employees to follow.
If ethics are poor at the top, that behavior is
copied down through the organization.
Robert Noyce
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Guidelines for Managing Ethics in the Workplace
Managing ethics in the workplace requires certain tools. Every organization
needs a Code of Ethics, a Code of Conduct, and Policies and Procedures, which
we will discuss later. These tools direct the organization as leaders attempt to
manage ethics.
Guidelines for Implementing and Managing Ethics:
Give it time: Managing ethics is a process-oriented activity that requires time and constant
assessment.
Focus on behavior: Do not give vague requirements; make sure that ethics management has an
impact on behavior.
Avoid problems: Create clear codes and policies that will prevent ethical problems.
Be open: Involve different groups in ethics program and make decisions public.
Integrate ethics: Make sure that all management programs have ethical values.
Allow for mistakes: Teach employees how to behave ethically, and do not give up when
mistakes happen.
Roles and Responsibilities
The roles and responsibilities necessary to effectively implement workplace ethics
will vary with each organization. A manager should be in place to oversee the
ethics program, but he or she will need the support provided by other positions.
Smaller organizations may not need to fill all of the roles listed below; determine
what your company needs before executing an ethics program.
Roles:
CEO: The CEO of every company needs to support business ethics and lead by example.
Ethics committee: An ethics committee will develop and supervise the program.
Ethics management team: Senior managers implement the program and train employees.
Ethics executive: An ethics executive or officer is trained to resolve ethical problems.
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Ombudsperson: This position requires interpreting and integrating values throughout the
organization.
Module Three: Review Questions
1. Which is not an organizational benefit of ethical companies?
a) Convinces employees that the company truly values ethical decision-making b) Builds awareness of ethical issues.
c) Creates an ethical guideline for employees to follow d) Less profits
2. Which is not a tool for managing ethics in the workplace?
a) Give it time b) Immediately fire those who make ethical mistakes c) Be open d) Integrate ethics
3. Do all companies need to fill the roles of CEO, ethics committee, ethics management team,
ethics executive, and ombudsman?
a) Yes b) No
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Module Four: Employer/Employee Rights
An ethical organization is able to balance the rights of employees with
the rights of the employer. The personal rights of each party may seem
to conflict at times, and the privacy laws vary between states. This is
why privacy policies are so important. Instituting clear privacy policies
will prevent any confusion between employees and employers. When
creating policies, employers need to remember that they are obligated
to provide employees with a safe work environment that is free from harassment, and this may require
what some people consider an invasion of privacy.
Privacy Policies
Employee privacy is a tangled legal issue. Companies collect detailed personal
information about their employees for background checks and other reasons,
and they need to clearly state the purpose of collecting this information and how
it will be used in their privacy policy. Personal information must be protected
and kept confidential, and the employees need to agree to the background checks.
Surveillance, drug testing, and searches are points of contention for many employees, and they need to
be addressed in privacy policies. Employees argue that they have the right to personal privacy at work,
but there are limits to their privacy as more businesses take drastic measures to prevent theft and
harassment.
Surveillance: Organizations routinely monitor the phone and Internet usage of their employees while
they are at work. Legally, these steps are protected in many countries because the company phones
and Internet are company property. Security cameras are also used to ensure the safety of employees.
Experts advise employers to include in their privacy policies, a warning to employees that they will be
monitored. There are limits to the use of cameras. For example, cameras are not allowed in locker
rooms or bathrooms. Always check the legal ramifications of using surveillance.
Freedom is the right to be wrong, not the right
to do wrong.
John G. Diefenbaker
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Drug Testing: Taking a drug test before beginning a new job is common, and employers also have the
right to demand drug tests in the event of an accident or suspicion of drug use. Random drug tests,
however, can be contested if they violate employee privacy. The policy on random drug testing need to
be reasonable and clearly spelled out. Companies are responsible for keeping drug test results private.
Searches: Privacy policies need to remind employees that their workspace and tools are company
property, and that they are not responsible for any lost or damaged personal property. This should
prevent any invasion of privacy claims if an employer who suspects theft searches a locker. Searches
should be conducted carefully and with the instruction of senior management.
Harassment Issues
Companies are legally bound to provide a safe working environment for all of their
employees. Employees can sue their employers for not protecting them from
harassment. The EEOC protects the rights of individuals from discrimination and
harassment, regardless of ethnicity, sex, religion, sexual orientation, disability,
age, etc. An employee who feels threatened or uncomfortable by any statement, gesture, or action may
be experiencing harassment. An anti-harassment policy and training in harassment will help prevent
harassment and protect the organization. Any harassment in the workplace needs to be confronted
immediately and the rights of the harassed employee protected.
Technology
As technology changes, so does the clarity about employer and employee rights.
Employers have the right to expect their employees to work productively and
represent the company well. On the other hand, employees have the right to
personal privacy. Advances in technology provide employers with more ways to
monitor employees. Social networking further complicates this issue.
Employees often post things online for their friends to see, but employers may be monitoring these
posts well. It is becoming more common for people to lose their jobs because of posts on their social
networking sites. A recent survey revealed that about half of employees feel that their social networks
are not any business of their employers, but 60 percent of executives think that they have the right to
monitor their representatives’ social network behavior. This use of social networks should be included in
privacy policies to protect both employee and employer, but many companies cite personal conduct
policies to validate their actions.
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Module Four: Review Questions
1. Does personal information need to be protected and kept confidential for a company to be
ethical?
a) Yes b) No
2. Ethical companies protect the rights of individuals from discrimination and harassment,
regardless of what?
a) Ethnicity b) Age c) Religion d) All of the above
3. The use of social networks should be included in what, to protect both employee and employer?
a) Privacy policies b) Employer agreement c) Validation report d) Test agreement
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Module Five: Business & Social Responsibilities
Most successful businesses operate with socially responsible
business practices. Being socially responsible requires companies to
integrate the needs of their stakeholders into the values and
operations of their organizations. Stakeholders typically include
investors, customers, employees, the community and the environment. Social responsibility strives to
consider all of these needs in their business practices.
Identifying Types of Responsibilities
There are different types of responsibilities related to businesses. Ethical
organizations need to cover different areas of responsibility and consider the
social ramifications of their actions.
Types:
Legal: Socially responsible companies are obligated to meet legal requirements that govern their
industries. Health and safety standards and fair treatment of employees fall under this type of
responsibility.
Financial: Financial responsibility is more than turning a profit. Financial ethics cover everything
from fair salaries to fair payments for raw materials and services as well as not price gouging
customers.
Philanthropic: Many organizations are being recognized for their philanthropy. Philanthropy can
come from donations, service, education, and environmental programs. Some companies
consider the environment its own type of social responsibility.
It is not good enough to do what the law
says. We must be in the forefront of these
(social responsibility) issues.
Anders Dahlvig
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Case Study
Jeff Swartz, CEO of Timberland, volunteered with an urban outreach in 1989 and
donated 50 pairs of boots. This experience led to the beginning of a program
called the Path to Service that officially began in 1992. This program helps
employees become involved in different community projects. Over 95 percent
of employees take advantage of the program. The Path to Service attracted many employees who
believed it to be a crucial benefit. GREEN (Grassroots, Reduce-reuse-recycle, Engagement, Education,
and Neutral) followed in 2008, which focuses on building community gardens and playgrounds. The
company also donates money and product for charitable purposes.
Handling Conflicting Social and Business Responsibilities
Sometimes social and business responsibilities conflict with each other. This is
particularly true when social business practices cut into shareholder earnings.
This is a struggle for most public corporations. Businesses need to provide their
shareholders with earning to convince them to continue to invest their money
into the company. Sometimes this means scaling back a social program or waiting to implement one.
Lean earnings and a poor economy complicate the balance between social responsibility and company
growth. Without shareholders, however, the company will lose the wealth that backs social programs
and the community will face further losses.
Case Study
Starbucks has been a popular employer because of the many benefits that it provided
its employees. It was in the top ten of Fortune’s 100 Best Companies to Work For, and
was able to exemplify social responsibility while growing shareholder revenue. The
economic downturn took its toll on the well-known company, and cuts had to be made.
Stores were closed and positions throughout the organization were eliminated. Some
of the employee benefits were cut back, but the policy of providing health insurance to part-time
employees still remains in effect. 2010 was a good year for Starbucks financially, and CEO Howard
Schultz’s refusal to cut healthcare ensured the company a place on Fortune’s 100 Best Companies to
Work For in 2011, albeit a bit lower than it was a few years ago.
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Module Five: Review Questions
1. Which is not an area of responsibility that must be considered in regards to social ramifications
of their actions?
a) Legal b) Financial c) Philanthropic d) Internal politics
2. What percentage of Timberland employees are involved in the Path to Service program, which
helps employees be involved in community programs?
a) 1% b) 10% c) 25% d) 95%
3. What typically conflicts with social responsibility?
a) Social earnings b) Public needs c) Business earnings d) Summary decisions
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Module Six: Ethical Decisions
We should always attempt to make ethical decisions. It is possible,
however, for two ethical people to make different decisions in a
situation. In business, it is important that people understand ethical
dilemmas and the ethical decision-making process.
The Basics
People typically use five different ethical standards to interpret the world
around them. For the best results, put the different approaches together
and choose the answers that best fit.
Ethical Standards
Utilitarian approach: This approach focuses on the consequences of actions. The goal is to do
more good than harm in a situation.
Rights approach: Focusing on the rights of all involved defines this approach. It makes
respecting the rights of others a moral obligation.
Fairness approach: Fairness expects people to be treated equally. A fairly based standard is used
to determine actions that are unequal such as pay rate.
In the end, success or failure will come
down to an ethical decision….
Edward O. Wilson
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Common Good approach: The conditions that affect all people are considered in the common
good approach. Systems and laws are created to ensure the welfare of everyone.
Virtue approach: This approach uses virtues such as honesty, compassion, love, patience, and
courage to guide behavior.
Balancing Personal and Organizational Ethics
It is important to be ethical on a personal and organizational level.
Personal ethics influence decision both inside and outside of work. These
are based on personal beliefs and values. Organizational ethics determine
workplace decisions. Managers and employees both face organizational
ethics, and the company should have ethical standards in place.
Organizational ethics flow from the top down. Those in leadership need to promote ethical decisions by
their example. Occasionally, personal and professional ethics will collide. In the event of an ethical
dilemma, it is important to choose based on what is most important and what will do the best for the
parties involved.
Common Dilemmas
There are many different ethical dilemmas in business that are specific to
industries. There are, however, common dilemmas that every organization
will face.
Honest accounting practices
Responsibility for mistakes such as accidents, spills, and faulty product
Advertising that is honest and not misleading
Collusion with competitors
Labor issues
Bribes and corporate espionage
Law governs many of these dilemmas, but an ethical organization will make the right decision regardless
of legal issues. Because these issues are so common, it is important to create ethical standards and train
employees to behave accordingly.
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Making Ethical Decisions
Before making any final decisions, use the following steps to make sure that you
are making ethical decisions.
Determine the ethics of a situation: Does the decision affect a group or
have legal ramifications?
Gather Information: Learn as much as possible about the situation, and get
the point of view from all parties involved.
Evaluate Actions: Make different decisions based on the different ethical standards.
Test Decisions: Would you be proud of this decision if it were advertised?
Implement: Implement the decision, and evaluate the results.
Overcoming Obstacles
There will always be temptation to act unethically. These obstacles are particularly
difficult to overcome when other people are encouraging you to behave unethically.
They may be in positions of authority or simply intimidating, but you do not have to
give into them.
Overcome Obstacles:
Sympathize: Do not attack unethical people. Sympathize with their situation, but refuse to
compromise your standards.
Make them responsible: Do not quibble. Directly ask people if they want you to do something
illegal or unethical. This removes their plausible deniability.
Reason: Provide them with logical reasons for your refusal to compromise your integrity.
Stay firm: Make a decision and stick to it. Do not let people wear you down.
Take precautions: Keep a paper trail of your encounters, and be prepared to defend yourself.
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Module Six: Review Questions
1. Typically, there are how many ethical standards for interpreting the world?
a) 3 b) 5 c) 8 d) 10
2. Organizational ethics flow from where?
a) Bottom up b) Top down c) Public domain d) Employee actions
3. Honest accounting practices, accurate advertising, and taking responsibility for mistakes are
examples of what?
a) Common dilemmas b) Ethical targets c) Laws d) Rights of business
4. What is the first step to making ethical decisions?
a) Can the problem be ignored? b) Does the decision have legal ramifications? c) Can the issue be solved with more money? d) Is there a way to make money from the situation?
5. Which is not a tool to be used when others are encouraging you to be unethical?
a) Bribery b) Sympathy c) Reason d) Staying firm
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Module Seven: Whistle Blowing
Whistle blowing is either seen as a public service or a petty act of
tattle telling. Whistleblowers create public concern over misconduct.
Blowing the whistle is not an easy decision to make. While legally
protected, whistleblowers take on serious personal risks by informing
on their employers. There are circumstances, however, that need to
be reported in order to protect the public.
Criteria and Risk
The term “whistleblower” is British, and it comes from the whistles that the
police used to carry to alert the public and other police to a crime.
Whistleblowers point out serious infractions that break the law; risk public or
employee health; fraud; or signs of corruption. Telling on a co-worker who was late is not whistle
blowing.
Legal protection has been provided to whistleblowers since the 1960s, and the laws have changed to
keep up with the times. While there is legal protection for whistleblowers, they do face retaliation. They
may be fired for unrelated reasons, harassed, or intimidated. They may find it difficult to find another
job because of their reputations as whistleblowers.
The Process
There are two types of whistleblowers: internal whistleblowers and external
whistleblowers. Internal whistleblowers go to someone within the organization to
report a problem. Many companies have ways of doing this anonymously so that
the employee will be protected from retaliation. External whistleblowers go outside the organization
with the issue. They go to law enforcement or the media. External whistle blowing is the best method
Integrity is telling myself the truth. And
honesty is telling the truth to other people.
Spencer Johnson
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for businesses that are corrupt from the top down. Once the whistle is blown, whistleblowers need to
protect their rights and possibly seek legal counsel to shield themselves from
retaliation.
When You Should “Blow the Whistle”
Think carefully before blowing the whistle. Doing so is neither fun nor easy.
There are situations, however, when blowing the whistle is the right thing to do.
If the rights, health, or safety of others is knowingly compromised and no one
will fix the problem, the whistle needs to be blown. It is the ethical thing to do.
Blowing the whistle legally requires you to have a “reasonable belief” that the violations occurred with
company knowledge. This means that others could assume the same breaches occurred as the
whistleblower. It is best to have evidence of the misconduct before moving forward.
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Module Seven: Review Questions
1. Whistleblowers are protected under the law?
a) True b) False
2. What are the two types of whistleblowers?
a) Legal and Illegal b) Social and Political c) Red and Green d) Internal and External
3. Blowing the whistle legally requires you to have ________ ________ that the violations
occurred with company knowledge?
a) Reasonable belief b) Unknown knowledge c) Plausible deniability d) Monetary motivation
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Module Eight: Managerial Ethics
Managers have a responsibility to behave ethically and manage ethically.
They set the example for all employees and will determine how effective
ethics management can be. Ethical management provides a number of
benefits, both to the company culture and financial gain of the
organization.
Ethical Management
Ethical management balances the different responsibilities of modern business
organizations.
Responsibilities:
Profit: All companies are responsible to make a profit in order to survive and fulfill their other
obligations.
People: This includes employees, customers, shareholders, and the community.
Planet: Sustainability and the preservation of resources is a growing responsibility for
businesses.
Principles: The ethics that govern the organization will help the company to act ethically in
every area.
Identifying the Characteristics
… if you want to test a man’s character
give him power.
Abraham Lincoln
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There are many different characteristics of ethical management. There are three traits, however, that
people identify with ethical management:
Integrity: The manager behaves with integrity and leads by example.
Transparency: The company and its managers are transparent and do not hide their actions.
Utilitarianism: The organization and manager considers the happiness of the people involved in
the organization.
Ensuring Ethical Behavior
Because ethics and values are extremely personal, it is difficult to ensure that
all employees will practice ethical behavior. There are ways to promote ethical behavior, however, by
simply instilling a few basic rules.
Develop an ethics management program.
Develop a code of ethics.
Develop a code of conduct.
Create policies and procedures that reflect the company ethics.
It is not enough to simply create codes, programs, policies, and procedures. All rules must be enforced in
order to be effective and curb unethical behavior.
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Module Eight: Review Questions
1. Being an ethical manager you are responsible for what?
a) Profit b) People c) Principles d) All of the above
2. Which is not a trait that is associated with ethical management?
a) Integrity b) Transparency c) Greed d) Utilitarianism
3. What are ways to help promote ethical behavior?
a) Develop an ethics management program b) Develop a code of ethics c) Create policies and procedures that reflect the company ethics d) All of the above
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Module Nine: Unethical Behavior
Employees will act unethically from time to time. It is important to be
able to identify unethical behavior and address it. A successful
manager should also be able to prevent poor behavior and intervene
before the behavior escalates.
Recognize & Identify
Stress can take its toll on employees, who will occasionally act out at work. When
unethical behavior begins, managers need to identify it as soon as possible.
Allowing unethical behavior to continue will have long-term consequences for the company.
Typical Unethical Behavior
Abusing sick leave
Lying to customers
Cutting corners
Covering up mistakes
The behavior may seem minor; most people are guilty of at least one these incidents. These minor
lapses in ethical judgment, however, can lead to more unethical behavior later.
An ethical person ought to do more than
he’s required to do and less than he’s
allowed to do.
Anonymous
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Preventing
Preventing unethical behavior is much easier than dealing with the aftermath.
We have already addressed ways to prevent unethical behavior such as
implementing a code of ethics and ethical policies, and taking swift action.
Another tactic that can prevent unethical behavior is improving job
satisfaction. Employees often react to situations they feel are unfair.
Addressing
Unethical behavior needs to be addressed carefully. It is important to discuss
the situation face-to-face. If the behavior specifically violates company policy,
remind the person about the policy. If the situation is a grey area, you may
have to explain why it was not ethical. Approach the situation calmly, and allow people to explain their
actions. Do not jump to conclusions, and understand that people sometimes need guidance making
ethical decisions. Should unethical behavior continue, take the necessary disciplinary action.
Interventions
Workplace interventions occur when people are concerned about the welfare of their
co-workers. Interventions are usually used to help co-workers with addiction
problems such as alcohol or drug abuse. They can also be held when assisting co-
workers to deal with unethical behavior specifically committed at work. There are
certain steps that need to happen if anyone chooses to hold an intervention.
Call an interventionist: A professional is needed to handle the situation.
Create an action plan: Plan how the intervention should go.
Meet: Have the group meet together beforehand to iron out details.
Intervention: Hold the intervention for an hour or two, and dialogue without judgment.
Treatment: Help the co-worker find treatment if he or she decides it is necessary.
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Module Nine: Review Questions
1. It is important to address minor unethical behavior like cutting corners and abusing sick leave
because it may lead to more unethical behavior in the long term?
a) True b) False
2. It is easier to deal with the aftermath of unethical behavior than it is in preventing it?
a) True b) False
3. What should be done before a workplace intervention is preformed?
a) Call an interventionist b) Create an action plan c) Meet beforehand d) All of the above
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Module Ten: Ethics in Business (I)
Ethics in business requires diligence and hard work. The entire
organization needs to be on the same page in order for people to make
ethical decisions. It is important to create codes and principles to guide
people. The ethical principles and codes that the company uses,
however, should directly reflect the needs of the business.
Organization Basics
When building an ethical business it is important that the roles and
responsibilities of each member of the company are clearly outlined. An
organizational chart will help determine how an ethics program will run. There
will need to be a chain of command overseeing the ethics program. The interrelationships of these roles
should be established along with the ethical standards that must be embraced at every level. Remember
that business ethics begin at the top of the organizational chart.
Addressing the Needs
The needs of the organization should be determined by surveying both
customers and the employees. Most companies have a plan to gauge customer
satisfaction. The company culture, however, is a clue to the ethics of the
business. Anonymous surveys allow people to describe how the company runs
and what it needs to increase ethical behavior on every level of the workplace.
Needs to Address:
Company values
Personal responsibility
A business that makes nothing but money
is a poor kind of business.
Henry Ford
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Employee participation
Conflicts
Trust
Ethical Principles
An organization’s ethical principles should reflect its needs. For example a
company that ranks low in personal responsibility probably has a bullying
problem and needs to create principles that address the issue. There are a few
basic business ethics principles that most companies can benefit from
instituting.
Trust: Customers and employees react better to a company they trust and they feel trusts them.
Clarity: Make sure that all documents, codes, principles, etc. are clear and easy to understand.
Community: Support community involvement.
Accurate records: Keep all records and accounting up-to-date and above suspicion.
Respect: Treat all people with respect, regardless of their position.
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Module Ten: Review Questions
1. Business ethics begin where on the organizational chart?
a) Middle b) Bottom c) Employee level d) Top
2. Who should be surveyed to determine the needs of an organization?
a) Employees b) Employees and customers c) Customers d) Politicians
3. What should an organization's ethical principles reflect?
a) It's needs b) Profit margin c) Wages increases d) Production ability
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Module Eleven: Ethics in Business (II)
A successful ethics program needs safeguards and a clear code of
ethics. In order to get the most from a program, it is necessary to
evaluate and make adjustments from time to time. Becoming an
ethical business is a process that takes time, but it is possible to
succeed if all those involved uphold the program and continue
working towards a common goal.
Ethical Safeguards
Ethical safeguards need to be in place to ensure ethical behavior. Safeguards
take away the excuse that employees do not know better. Safeguards do more
than protect the company; they help bring in work. In fact, many government
agencies demand that those they contract with have ethical safeguards in
place.
Examples:
Code of Conduct
Employee training
Ethics audits
Developing a Code of Ethics
A Code of Ethics is the foundation of an ethics program. The Code of Ethics needs
to address certain issues.
Laws and regulations: All legal requirements need to be considered.
Being good is good business.
Anita Roddick
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Company needs: Consider the needs of the organization when creating a code.
Ethical values: Use the ethics and values of the company. Include two examples for each value.
Wording: Make sure that everyone knows that they have to abide by the Code of Ethics.
Update the code each year, and make sure that everyone has a copy of these guidelines.
Performing an Internal Ethics Audit
An internal ethics audit utilizes several different sources. An auditor (or a
committee, if there is no auditor) usually goes over the information to
determine if any adjustments need to be made.
Sources:
Surveys
Interviews
Documents
Focus Groups
Direct Observation
The audit is used to evaluate the design, execution, and effectiveness of the organization's ethical
objectives, programs, and activities.
Upholding the Ethics Program
There needs to be complete buy-in for an ethics program to be successful. It is
not implemented to keep employees from stealing office supplies. Managers
must uphold the ethics program by adhering to it themselves and holding all
of their employees to the same standards. Managers are also responsible for
ensuring that employees have all of the necessary resources to be successful, and that they are fully
trained in any new policies or procedures.
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Module Eleven: Review Questions
1. Many government agencies demand that _______ ________ are in place before they do
business with private companies?
a) Ethical safeguards b) Profit safeguards c) Labiality safeguards d) Employee retentions
2. A Code of Ethics is the foundation of an ethics program. The Code of Ethics needs to address
what issues?
a) Laws and regulations b) Company needs c) Ethical values d) All of the above
3. Who is exempt from the Code of Ethics?
a) CEO b) Shareholders c) No one d) Board of directors
4. Why is it important to perform an internal ethics audit?
a) Evaluate the design of the ethics program b) Evaluate the effectiveness of the ethics program c) Evaluate the execution of the ethics program d) All of the above
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Module Twelve: Wrapping Up
Although this Unit is coming to an end, we hope that your journey to
improve your business ethics is just beginning. Please take a moment
to review and update your action plan. This will be a key tool to guide
your progress in the days, weeks, months, and years to come. We
wish you the best of luck on the rest of your travels!
Words from the Wise
Here are a few thoughts that we would like to leave you with, to accompany you on your journey.
Juanita Kidd Stout: A person educated in mind and not morals is a menace to society.
Zig Ziglar: The most important persuasion tool you have in your entire arsenal is integrity.
James MacGregor Burns: Divorced from ethics, leadership is reduced to management and
politics to mere technique.
Action indeed is the whole medium of
expression for ethics.
Jane Addams